Ørsted’s (CSE:ORSTED) DKK 60 billion rights issue has eased immediate balance sheet concerns, but its ability to move past U.S. setbacks and execute key asset disposals will decide whether the Danish renewable energy group can stabilize.
RBC Capital Markets said that while the equity raise improves leverage in the near term, “significant risks remain in the US and we await further visibility on Ørsted executing on guided >DKK 35bn of disposals.”
The biggest headwind comes from the United States, where a stop-work order on the Revolution Wind project has stalled progress and added costs.
The Danish renewable energy company is incurring about $25m each week from the suspension, with roughly $15.7m tied to Revolution and $10m to Sunrise Wind due to shared vessels.
“The lack of visibility around the Revolution Wind stopwork order is a material headwind for the stock in the near term,” analysts said, noting that a delay beyond September could lead to “significant additional costs” and potential penalties under power agreements.
With construction at Revolution nearly 80% complete, prolonged uncertainty raises the risk of pushing commissioning past the targeted second half of 2026.
Sunrise Wind also remains under scrutiny, raising the prospect of another halt that would further erode project economics.
Legal action to overturn the Revolution Wind order is underway, supported by Rhode Island and Connecticut, but RBC emphasized that “poor visibility” persists on timing and outcome.
In parallel, Ørsted’s disposal program is central to limiting exposure to additional capital expenditure. The company has set a target to sell a 50% stake in Hornsea 3 by the end of 2025.
Analysts described this transaction as “significant in assuring the market that Ørsted will not have to absorb significantly more capex (~DKK 25bn) if it were stuck with 100% ownership of the project.”
The Greater Changhua 2b project in Taiwan, another key disposal, faces commissioning delays into the third quarter of 2026, which RBC said “may also add additional risk.”
Without disposals, Ørsted would face about DKK 30.5 billion in extra spending across Hornsea 3 and Changhua 2b, straining leverage.
RBC estimates the company’s funds from operations to net debt ratio would fall below its 30% target in 2026 and 2027 in such a scenario.
Following the rights issue, FFO/ND for 2025 is expected at around 35%, above the threshold needed to retain a BBB credit rating.
The medium-term outlook shows some relief, as capital expenditures are forecast to decline post-2027.
RBC projects a free cash flow yield of about 7% in 2028, with limited new projects in the pipeline beyond Hornsea 4 and Mooir Vannin in the U.K. Still, analysts cautioned that “we would not expect significant upwards moves in the stock prior to the resolutions of these events.”
RBC cut its price target to DKK 120 from DKK 320 and kept a “sector perform” rating. The brokerage noted Ørsted trades at a discount to peers, with an estimated 2026 EV/EBITDA multiple of 6.8x compared with a sector average of 9.5x.
At present, the rights issue offers breathing room, but execution in the U.S. and on asset sales remains decisive for Ørsted’s path forward.
Source :
https://www.investing.com/news/stock-market-news/can-rsted-overcome-us-setbacks-disposal-uncertainty-despite-rights-issue-boost-4243810
